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Doctors have accepted free meals, gifts, travel expenses and other payments from the drug and medical device industry for years. But because of concerns those payments might influence treatment decisions, the Affordable Care Act requires public disclosure.

Drug and device company payments to physicians may influence prescribing practices and treatment recommendations that may not be in the best interests of patients, especially when cheaper equivalents are available.

Now, investigative journalists with ProPublica have sorted the payments by each doctor’s primary hospital. Not only does the data show wide variation across the country, but the extent to which doctors accept those payments depends greatly on the hospital with which they’re affiliated.

That holds true for San Diego County as well.

Except for Kaiser Permanente, more than half of doctors affiliated with 14 San Diego hospitals took some payment, ranging from half of those at UC San Diego Health to 83.8 percent at Scripps Green Hospital.

Of doctors affiliated with Kaiser Permanente, which has strict policies to restrict such payments, 27 percent took payments.

Those trends persist for doctors who took larger sums of money. For example, nearly 13 percent of Scripps Green’s affiliated doctors received industry amounts of $5,000 or more, and 13.5 percent of those with UCSD. At Kaiser, only 1 percent received payments of at least that size.

Kaiser hospitals in other parts of California also had much lower percentages of doctors accepting such industry funds. Overall, the rate of San Diego County doctors accepting payments was higher than the California rate.

ProPublica, a New York-based investigative journalism organization, sorted and analyzed the federal database and shared it with various news organizations, including inewsource, for local scrutiny. ProPublica’s national story detailing ownership trends and other details is here.

The database contains $7.49 billion in industry payment details for 2014. The information was made available under a provision of the Affordable Care Act called “Open Payments” — also referred to as the Sunshine Act. ProPublica looked at each hospital based on payments that hospital’s affiliated doctors accepted, so that differences in policies and cultures would become evident.

The listings of these doctors’ payments does not mean they are illegal, although if any involve direct kickbacks, they could be. Some payments may violate California Fair Political Practices Commission rules, or their own hospitals’ rules.

The issue is important because of concerns that drug and medical device manufacturers’ payments to doctors in the form of gifts, meals, speakers fees, consulting fees, royalties and travel reimbursement may influence their prescribing practices and care decisions.

The idea that hospitals legally can’t bar industry payments to their doctors is “preposterous. Hospitals find ways to work with doctors all the time, and now is not a time to shield themselves behind that law. What they’re really saying is, this isn’t a high enough priority.”
— Dr. R. Adams Dudley, UCSF

Even a gift valued as low as $20 can influence a physician to prescribe a higher priced drug when a less expensive equivalent is available, according to a report last week in JAMA Internal Medicine. The report was by Dr. R. Adams Dudley, director of the University of California San Francisco Center for Healthcare Value.

Most hospitals exert little control over whether their doctors take industry payments.

Asked about the high percentage of their doctors who did, hospital officials responded with statements that they require conflict of interest disclosures from their physicians, and often review when thresholds exceed certain amounts.

But several officials shifted responsibility for curtailing inappropriate payments over to medical groups or the doctors themselves, pointing to a state law that prohibits nonacademic and nongovernment hospitals from directly employing physicians.

“We have the (ban on the) Corporate Practice of Medicine law in California so the physician is not employed by Scripps in terms of practicing medicine. So in almost every case, the relationship between a physician and pharma or medical device companies is between them,” Chris Van Gorder, president and CEO of Scripps Health, wrote in an email.

Chris Saunders, spokesman for Palomar Health, where 6.2 percent of doctors took at least $5,000, wrote in an email, “We have no responsibility for what physicians with privileges at Palomar Health do in private practice with regard to their relationships with pharmaceutical companies and other vendors.”

And Elizabeth Nikels, spokeswoman for Prime Healthcare, which owns Alvarado and Paradise Valley hospitals, said that while Prime requires physicians to sign statements and disclose conflicts of interest in their initial and recredentialing applications, and discourages relationships that “may affect physicians’ ability to provide unbiased patient care,” their physicians “are all independent and not employed.”

Dudley said in an interview that comments like those are mere excuses.

“It’s preposterous,” he said. “Hospitals find ways to work with doctors all the time, and now is not a time to shield themselves behind that law. What they’re really saying is, this isn’t a high enough priority. If they want to build a cancer program, they find a way to work with their doctors. They put requirements on their doctors all the time.”

For example, many hospitals require that all of their doctors be board certified in their medical specialties as a condition for receiving staff privileges. That means there are certain requirements that doctors have specific training and meet criteria to assure they stay up to date and pass periodic exams.

Several years ago, Dudley said, UCSF banned pharmaceutical representatives from the hospital and outpatient practices on campus “because of concerns that it would lead to inappropriate drug use, and a fair number of other organizations like Kaiser have done that as well.”

Kaiser Permanente’s low rates of physicians’ receipt of industry money is an example of how a hospital organization can influence physician behavior, Dudley said.

In a statement, Kaiser Permanente San Diego spokeswoman Jennifer Dailard sent Kaiser’s 56-page “Principles of Responsibility” handbook. She said the system has “strict rules regarding gifts from vendors” to make sure doctors have “objectivity in clinical care and research.”

One of the few Kaiser Permanente San Diego physicians who received more than $5,000 is Dr. Scott Shoemaker, a neuromuscular specialist, who received $341,235 in 85 payments. Dailard said Shoemaker’s payments represent royalties for the use of a device he invented several years ago before he joined Kaiser.

“He has no part in deciding whether his device is used within Kaiser Permanente, nor does he receive any royalties if and when the device is used within Kaiser Permanente,” she wrote in an e-mail.

Concern about conflict of interest has prompted some hospitals to set limits on how much the industry can attempt to shape physicians’ treatment decisions.

He also detailed an elaborate process by which three layers of leadership at each Sharp facility and medical group review physicians’ financial disclosures. Additionally, physicians who receive industry payments of at least $10,000 “can not prescribe that (product) for patients without providing disclosure that they received that … and they also have to offer a generic alternative.”

However, the Sharp system relies primarily on physicians’ financial disclosures, and has not reviewed federal databases to doublecheck industry payments to its doctors. Gross was not aware of the ProPublica database until an inquiry from inewsource. What he saw there, he said, surprised him.

“With additional resources now becoming available, such as ProPublica’s … why shouldn’t we include that in our evaluation?” Gross asked rhetorically. “I do anticipate we will be modifying our policies to include these types of external reviews.”

The ProPublica spreadsheets also allow users to see which doctors received the most in industry payments within his or her own hospital, and compare those amounts to the top dollar payments to doctors at other hospitals.

For example, Dr. William Taylor, a UCSD neurosurgeon, received $706,019, the highest amount of any doctor reported in San Diego County, in 83 separate payments, all of which he said in a phone interview “was turned over to the university.” Much of that money came from Nuvasive Inc. and DePuy Synthes Products LLC, and some of it was listed as food and beverages and consulting fees.

(UCSD spokeswoman Jackie Carr said doctors are allowed to keep $40,000 or 40 percent of their base salary, but must turn over anything more to the relevant UCSD department for use on clinical operating expenses and compensation packages. If there is money left after those expenses are paid, the remainder can be returned to the physician, but Carr declined to say whether UCSD returned money to Taylor.)

And Dr. Ramin Bagheri, an orthopedic surgeon affiliated with Sharp Memorial, received $576,309 in 83 payments. Much of it from royalties or consulting fees from Nuvasive Inc. Sharp spokesman John Cihomsky said Bagheri resigned March 30 and is now with Scripps Health.

The Centers for Medicare & Medicaid Services plans to release a new physicians’ payments database for 2015 on June 30.

This story was updated on 6.30.16 to reflect the release by the Centers for Medicare & Medicaid Services of new Open Payments data for 2015, and updated information for 2014.

About the data

ProPublica analyzed the 2014 payment data for hospitals that have at least 50 doctors “assigned” to them, either by self report or on the basis of Medicare claims they submitted. Here’s a link to its methodology.

It does not include doctors who do not participate in the Medicare program, but who rely on insurance payments or self-payments exclusively.

It also compiled national summaries of rates by state, and by hospital ownership, and whether it was a teaching hospital, regardless of the number of doctors assigned to it.

The database reveals that California ranks the 25th highest in percentage of doctors who received at least $100 (48 percent), 21st in percentage of doctors who took $1,000 (17 percent) and 10th highest in percentage of doctors who took at least 5,000 (5 percent).

The data also includes the top 100 medical specialties whose receipt of payments from the industry must be reported to the federal government. Nurse practitioners and physician assistants are excluded. Also, data for several physicians may be attributed to them at one institution, even though they received the money while working with another.